As an ecommerce business owner, I focused on growing revenue. With increasing competition in most markets, ecommerce merchants need to continually grow revenue to add stability to their businesses and to cover rising operating costs.
Recall from my previous articles — such as "Who Needs an Ecommerce Strategy, Anyway?" — a "strategy" is an idea. A "tactic" is a plan or action to support your idea. Here are seven revenue-growth strategies to consider.
- Acquiring new customers.
- Targeting new markets.
- Sell more to existing customers.
- Increase your average order size.
- Expand your product lines.
- Increase prices.
- Cross-channel marketing.
Some of these strategies are quick and inexpensive to implement — remarketing to your existing customer base, for example. Others are more expensive and time consuming. When evaluating strategies, remember the big picture. Though more expensive and time consuming, investing in a new store serving a new market may double your business, versus the incremental bump you may receive from another idea.
Acquiring New Customers
Every ecommerce business presumably seeks new customers. But, are you really focused in that effort? Here are some ideas.
- Referral sales. Set up a referral program to leverage your existing customers. Give them an incentive to refer your to their friends through social media, email or other venues.
- Increase advertising. Pay-per-click ads, remarketing ads, content ads, print ads targeting new customers, keywords, or products.
- Social media buzz Run a sweepstakes or contest in Facebook to get new email subscribers, blog a lot, Tweet about your specials and new products, expand your followers and fans.
- New positioning. Create a new marketing campaign with a fresh look and feel that will appeal to a different market segment, refresh your website with a more modern look, get some media exposure and create buzz about something you do differently than your competition.
If you want to increase your sales by 20 percent, you need to acquire 20 percent more customers. It’s possible that your new customers will not buy quite as much initially as your current ones, so factor that into your plans.
Targeting New Markets
By "new markets," I’m referring to entirely new consumers that don’t know your store exists.
In some cases new markets may be reached through a new store. In other cases, such as targeting an overseas market, it may require translating your website into the local language.
- Overseas markets. Consider localizing your website for various languages and target those countries through ads, social media and other marketing efforts. In the case of English-speaking countries, it may be as simple as creating new landing pages to reassure customers that you are committed to serving their country and understand shipping, customs processes, and local habits.
- Niche market. You can expand your offerings in a niche market and open a new store to just service it. We did that in my previous ecommerce business by opening a store that focused on jewelry, instead of beads and pendants.
- Broader market. If you have a niche store, consider expanding your offerings to a broader market.
- Wholesale or retail? There are many stores that start out either wholesale or retail and find that by simply modifying their pricing strategies they are able to serve the other market. Be clear about the differences — there are many. But it is a viable alternative for many ecommerce businesses.
- Mobile. More and more people shop on their smartphones. You will lose sales if you do not serve this market.
- Sell in a new channel. Expand your product offerings to marketplaces like Amazon, Buy.com, Overstock.com, Sears.com, or eBay. In many cases, these are different consumers than your existing ones. When we added an Amazon store in 2010, for example, we found a great new market for products we had previously sold mostly wholesale. It turned out to be a high-volume and high-margin marketplace for some very obscure gemstone pendants that were not selling well in our original target market.
The advantage to targeting new markets as a strategy is the impact can be huge versus incremental. The disadvantages are that the investment can be substantial and the risk higher.
Sell More to Existing Customers
I like this strategy for most businesses. Merchants sometimes get lost in trying to get new customers and forget about the thousands of customers who buy from them already. There are many ways to get more revenue from your existing customers. Most of them require little investment.
- More remarketing. Email newsletters are a tremendous way to do remarketing. You can email promotions for abandoned shopping carts, send transactional email promotions with all orders and shipping confirmations. You can target promotions to the most likely buyers for the products you sell.
- Aggressive promotions. Target your email subscribers, Facebook fans, and Twitter followers with aggressive promotions on a limited number of items. Offer them deals only on the products you know they like and try to up-sell and cross sell other products with higher margins. People like a deal. We found that customers will also spend money on other impulse buys at the same time.
- Loyalty programs. This is a no brainer to me. Offer your most loyal customers an enticement. It can be as simple as free or same day shipping. In our case, we offered customers who spent over a certain threshold an additional annual discount. That kept them loyal to us and decreased the likelihood they would shop around for a better price.
- Daily deals. Offer a daily deal to keep people looking at your store and keep your brand front and center. It will increase the likelihood of purchasing from your store, even if they don’t respond to the deal of the day